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We were discussing the pro's and cons of dividends recently. This why I believe that some of the profits made by companies are returned to investors and not frittered away on useless aquisitions.
Regards
Harmy

http://www.nytimes.com/2002/02/02/business/02EBBE.html?pagewanted=print

>>Over the last 19 years, investors have poured more than $100 billion into this rural Mississippi telephone company, and basically, Worldcom has done nothing with the money except buy other phone companies. As a result, the company now sits, as of Sept. 30, 2001, with worthless goodwill on its balance sheet totaling more than $50 billion — so far as I am aware, the biggest such mountain of fake assets in all of corporate America. Add to that some $30 billion of long-term debt, plus $10 billion of unpaid bills and other short-term obligations, and you've pretty much got the whole WorldCom financial picture.
And here's the really interesting thing: Over the course of the 1990s, this $100 billion Mont Blanc of waste has not been able to generate a single dime of net new cash for the business, with all free cash flow coming from stock sales and debt financings (the “cash Flows From Investing” part of the company's financials). In other words, the second largest telecommunications carrier in the country hasn't actually been a sound business from Day One, but has only seemed to be so because the economy was growing and stock prices were rising.<<
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